The IAB released their 2007 UK online ad spend study yesterday – the full PR is here. Two very interesting points from study included how the UK was ahead of online spending targets (gowing 38% to capture 15.3% market share) and is now predicted to pass TV in 2009. This is not a surprise to AdViking but still very significant.

To grow 38% from £2 billion to £2.8 billion is a very powerful performance, and with 16% share of media spend, the UK is head and shoulders above all other major world markets. It’s clear marketing directors now recognise the value of online to drive their business, and more and more are using rich media and video to build their brands, just as they do on TV.– Guy Phillipson, Chief Executive, IAB

Now that we have reached the point that Search is the Portal, we can all be forgiven for thinking that the user experience is no longer critical.

AdViking just read the excellent Dead Man Walking article on FastCompany on the continuing demise of AOL that proves this is far from the truth and in fact that User Experience is more important than ever.

Or better, let’s rephrase that to knowing what experience user’s want when they use your Search is more important than ever.

In response to a fall in Search traffic at AOL (38.9 million visitors in November 06 vs. 35.2 million in May 07). Ron Grant*, the new COO for AOL, took the executive decision that the fall was due to the fact that AOL returned a rich results set (e.g.: multi-media, pictures), that was reported to have a higher than Google effective return on advertising. And so deciding to buck the movement towards a richer search experience (ASK’s 3D search, Google’s Universal Search), Grant ordered the results set to be more look Google’s.

The results of this change could be considered catastrophic. Pali Research analyst Richard Greenfield said, “Management was blindsided by how disruptive the change to search was.” In a period of industry growth, AOL’s Search revenue fell from $232 million in Q1 to $156 million in Q2. To put it bluntly, one could say that the changes made to the AOL’s Search Experience could be blamed for the drop of $76 million in one quarter!

It appears that Users liked the Search Experience on AOL and the fact that is was different was the just the point. That is users were in a different mindset when they came to use AOL Search. Meaning, knowing who your users are and how they use your site is critical.

* Time-Warner company men, Steve Falco and Ron Grant, have been put in place as the CEO and COO of AOL. Employees and now the wider industry appear to have started to refer to Falco and Grant as Mr. Burns and Smithers.